Remember Auto Leasing? It’s Rebounding In 2024, Thanks In Part To EVs (2024)

FAQs

Is it smart to lease a car in 2024? ›

In 2024, whether to buy or lease a car depends on your individual needs and lifestyle. With manufacturers pushing more attractive lease deals, leasing may become a more appealing option for many. Leasing is a great way to avoid the worst effects of today's high interest rates.

If you lease one car after another, monthly payments go on forever. By contrast, the longer you keep a vehicle after the loan is paid off, the more value you get out of it. Over the long term, the cheapest way to drive is to buy a car and keep it until it's uneconomical to repair.

The Global Automotive Leasing market is anticipated to rise at a considerable rate during the forecast period, between 2024 and 2031. In 2023, the market is growing at a steady rate and with the rising adoption of strategies by key players, the market is expected to rise over the projected horizon.

Most new car models are released between July and October, so this is the time of year where you are most likely to find a great deal. But there are other times throughout the year where you may find great deals. Holiday weekends are a great time to find deals on new car leases.

Key Takeaways: Leasing a car is a better idea if you can't afford to take care of a vehicle and make larger monthly payments. Buying a car is better for those who want ownership of a car and can afford the costs of owning a vehicle such as maintenance, repairs, and gas.

Car Prices Will Likely Continue To Decrease

“Last month, the average price for a new vehicle was [$47,936] — a [1.4%] dip from last year, according to the latest KBB data. This suggests that new car prices might drop in 2024.” One factor that could lead to price drops is an oversupply of new cars.

"Remember, leasing or financing a car will not help you build wealth," Ramsey wrote. "It's much easier to save around $500 a month (the average car payment) for 10 months and buy a used car with no strings attached. Do you really want to sign up for a payment plan and pay thousands of extra dollars for several years?"

Overall, only 8.5% of these high rollers paid cash. Around 31% leased and 60.4% took out a loan with an average payment of $2,201 and an average term of 56 months.

You can opt for a shorter repayment term, which will reduce your overall interest charges but can result in higher monthly payments. Despite the drawbacks, buying is the better option for saving money. Unlike with leasing, financing a car eventually leads to ownership with no more monthly payments.

Is leasing a new car smart? ›

Deciding between leasing and buying a car will come down to your lifestyle, driving needs, and financial situation. Leasing can be attractive if you're looking for lower monthly costs, want a new car with new car technology every few years, and don't want to worry about certain tasks, such as selling your car.

Why are car leases so expensive now? The cost of cars has significantly increased, as has the cost of leases. Plus, many current lease contracts aren't as favorable toward drivers as they once were – a result of increased demand for new cars.

Most new models are introduced between July and October, so this is the time that you should try to lease to maximize your savings. 2) Holidays: Lease shoppers can find special dealership incentives during long holiday weekends, including President's Day, Memorial Day, July 4, Labor Day, and Thanksgiving.

What is the best length for a car lease? One-year lease deals are widely available, but two- and three-year contracts are most popular. Two-year leases offer greater flexibility to swap cars more frequently, but three-year leases generally offer lower monthly repayments.

In 2024, lease returns are expected to rise then fall. Experian predicts, “retail leasing returns will rise to 1.1 million in the second quarter of 2024, but then fall to only 640,000 by the end of that year.” So, if you're hoping to buy a pre-owned car in 2024, look around April to early summer for the best selection.

After a year of supply shortages and climbing borrowing costs, 2024 is shaping up to be a better time to buy a car. The average transaction price for a new car in the U.S. in February was $47,244, down 2.2% from February 2023. That's also down 5.4% from the market peak in December 2022, according to Kelley Blue Book.

It Might Not Save You Money

Yes, you can sign a long-term lease, but that may negate the monetary benefits of leasing instead of buying a car. That's because leasing typically costs you more than what you might have taken out in a long-term car loan.

If you want the best monthly deals, focus on a lease of 36-48 months (but first decide if you're happy to hold the car for that long) If you want to drive your car for less than two years, consider another option like a short-term car subscription (see below).